South African National Blood Service Business Model and Challenges Presentation to Portfolio Committee on Health 14 OCTOBER 2009

Transcription

1 South African National Blood Service Business Model and Challenges Presentation to Portfolio Committee on Health 14 OCTOBER 2009

2 Overview of SANBS SANBS is a section 21 company, not for gain. Provides a vein to vein blood transfusion service in 8 of the 9 provinces in SA. 780,000 units of blood collected annually (100% voluntary) units bled daily 2 testing centres - Johannesburg and Durban 7 blood processing centres 79 blood banks serving > 1000 hospitals and clinics. SANBS is accredited with the South African National Accreditation System (SANAS) Specific laboratories are ISO accredited HQ in Johannesburg

3 SANBS Footprint

4 Current Business Model Operate on a fee for Service basis Major customers Public Sector (59%) Other (41%) Majority Private Sector Medical aids Private patients WCA, RAF Service delivered up front and billing done later No payment guarantee required up front

5 Challenges with Current Model Late and non payment for services Severe impact on sustainability and cash flow Public sector prices, on average, greater than 20% less than that of private sector Medical aids reluctant to pay for some services Increasing bad debt among non medical aid patients going to private hospitals Bad debt increasing significantly

6 Key Strategic Challenges Operational environment Increasing costs to procure blood High HIV and HBV prevalence Increasing demand for O blood Provision of emergency blood to rural areas Competing for scarce skills Financial Pressure over past few years Market volatility Increased cost of imported products Cost of discards

7 Total Revenue / Total Costs For 7 years ( ) Total Revenues Total Costs

8 Surplus/Deficit (R000's) For 7 years

9 Cash Flow as at 31 March ,000, ,000, ,000, ,000, ,000, (5,000,000.00) (10,000,000.00) (15,000,000.00) (20,000,000.00) (25,000,000.00)

10 SANBS Operating Costs Activity Cost per usable unit Percentage (686,000 usable 12% discard) Rands Collection R % Testing R % Processing & Issuing R % Supply Chain R % Corporate Marketing R % Overheads R % Total R %

11 Operating Costs Direct Blood Collection and Issue Related costs 81.8% Donor Services 31.8% Processing, Testing, Issuing 37.4% Logistics/Supply Chain Services 6.2% Medical 1.1% Marketing 3% Quality 2.3% Overhead Costs 18.2% Administration 9.4% HR 2.8 % IT 4.1% Finance 1.9 %

12 Strategic Plans Key Objectives: Procure units of blood and continue year on year to increase collections Manage discards to a low level to minimise associated costs Increase Black donor base to be sustainable Ensure availability of emergency blood fridges in all hospitals providing Caesarian Sections. Roll out of Blood on a Returnable basis program Improved supply chain logistics Financial sustainability

13 Blood Collections Review Procurement - excellent in 2009 Average of 5 days stock for most of this period Meeting target for the year 1 st time in past few years September school holidays and Prelim-exams affected shortage for a brief period Zones working very well in managing the collections Planning and scheduling of clinics Actual collection of blood 7 days a week No need for cut backs in hospitals

14 Collections April to August 2009 Zone YTD All Group Target YTD All Grp Collections YTD % All Grp Target YTD O Group Target YTD O Grp Collections YTD % of O Grp Target Eastern Cape Egoli FS and NC KZN Mpumalanga Northern Vaal SANBS

15 SANBS Current / Future Challenges High prevalence of HIV continues to present a challenge in collecting low risk blood, especially among the 20 to 39 year olds More focus being placed on schools and 16 to 19 year olds Increasing our numbers in this age group Challenge is donation frequency is not as high as we are limited regarding number of times we can visit schools Problems with stocks during school holidays, especially in zones like KZN that collect a large proportion of blood from this group Collecting sufficient group O to meet demand continues to be the key focus and challenge Have increased the number of Black donors steadily over the past few years Low retention and repeat rate of donors is a challenge Background HIV prevalence constantly monitored

16 The HIV Problem in South Africa In increasing the Donor base focus has to be on recruiting and retaining The 16 to 19 year old donors

17 Collections among 16 to 19 year olds (9 month period) Zone Total Percent Egoli Free State/North Cape Northern Vaal Eastern Cape KwaZulu Natal Mpumalanga Grand Total

18 Type of Donor Donation frequencies Oct 06 to Sept 07 Repeat Donors Oct 07 to Sept 08 Sept 08 to Aug 09 Asian Black Coloured White Impact of above More donors must be recruited for fewer donations More 1 st time donors increased risk and discards Fewer donations per donor among 16 to 25 year olds Not managing to increase return rate among Black donors Need to look at Hb issues among Asian donors

19 Challenge in Meeting Demand for Group O Group O Prevalence among the Different Population Groups in SA Whites 47% Blacks 45% Asians 38% Demand for group O in 2009 is 55% of all issues Approximately 17% for rural areas and emergency use Large difference in population prevalence and usage leads to many challenges Must have high return rate so that regular group O donors can be targeted Return rate of <2 donations per annum not sustainable KZN zone with large Indian donor base needs to import group O s from other zones

20 Challenges in Meeting Group-O Demand The high demand for O s leads to excess group A s and AB s as a result and this is unavoidable SANBS needs 5-7 days group O stock to ensure adequate distribution and stock on blood bank shelves Due to increased demand, there are often cyclical shortages which drives up costs More resources are utilised in moving the available blood to where it is most needed A result is that % of blood is discarded due to operating in environment with high HIV and HBV prevalence and unavoidable expiries All collection, processing, storage and testing costs incurred for these almost units must be recovered to be sustainable

21 Progress in Increasing Black Donor Base Black Donors Contributing to Total Blood Donors as % of All Donors Year BLACK DONORS Whole Blood Collections from Black Donors as % of Total Collections Donor Type Active New Rejoined and Unknown All Donor Types Whilst donor base is increasing the contribution of donations is not increasing proportionately Increasing number of first time donors increasing risk and discards

22 Impact of High Ratio of 1 st Time Donors HIV Prevalence in Black Donors by Donor Status compared to All Donors Total Donor type Active New Rejoined (lapsed) All Black Donors All Donors Total Increased wastage and increased operational costs Increasing residual risk of TTI transmission Greater difficulty in achieving O target with fewer returning donors

23 Key Strategic Focus Relationships with Department of Health, Private Patients and NBI (plasma supplies). Growing and maintaining our active donor base to meet increasing demand for blood products. Ensuring financial stability to meet essential operating expenses and future capital growth Retaining committed and competent staff to carry the organisation into the future.

24 Government The historical model of Service Fees and State budgeting to meet blood services expenditure is no longer appropriate. It is clear that Provinces and hospitals do not have adequate budget capacity to meet blood service invoicing. This will have a major impact on essential service delivery and SANBS financial sustainability in the very near future.

25 Solution High level DoH & Ministerial meetings. Guarantee of payment at highest level is critical. Establishing effective communication channels. Annual Budget approval process proposed. Expected product usage and variation there from to be managed. Early invoice payment process. Penalty and/or termination of supplies. Monitoring of appropriate blood usage.

26 Private Patients SANBS provides annually >R 60 million for unrecoverable debt. Medical aids and/or uninsured private patients default on payment. Private Hospital Groups play no part in the invoicing and collection of private patient debt for blood transfusion. Fees to private patients bear a premium of 20%.

27 Solution Compilation of a new approach to private patient service delivery. Negotiation with Private Hospital Groups regarding process. Requisitions for blood being processed to ensure payment prior to delivery of services. Change in philosophy regarding non-supply if no finds available for payment for blood. Emergencies will not be affected, blood will be supplied so that patients health is not compromised.

28 Dealing with Challenges Managed a difficult 12 month period from financial perspective Ensured adequate blood stocks Maintained high levels of blood safety despite high background HIV and HBV prevalence Managed costs within budget Maintained accreditation of all sites Thanks to the whole team that contributed to achieving the mission of SANBS

29 Conclusions SANBS is geared to meet the needs of the South African Health System Financial sustainability is critical a new Payment Model is being discussed with the Ministery of Health Operational sufficiency and security of supply is critical Social Mobilisation Business management is reviewed for more efficiency and sustainability Supportive partnerships with all stake holders is key! Thank you!!

30 ANY QUESTIONS?